Troubled bitcoin loses some of its blossom in Hong Kong
Florist exchanges it for real cash fast as virtual money hit by hackers and a collapse in value
Wilting confidence in bitcoin following hacking attacks and a collapse in its value has failed to deter an online florist from using the virtual currency. But bosses at Flower Delivery Hong Kong are making sure they switch their takings back into real-world cash at the first opportunity.
Flower Delivery has seen growing interest in its business since it began accepting bitcoins a fortnight ago in time for the Valentine's Day rush, and has processed four bitcoin transactions worth a total of HK$600 so far.
Watch: Bitcoin for Valentine's Day flowers? 'OK' says cupid...er, flower shop.
While the Mong Kok-based company was yesterday processing more than 500 orders on its busiest day of the year, director Leslie Wu Wai-leung revealed that the company did not hold on to any bitcoins it received once the flowers were delivered.
"The negative, for most people, is the volatility of bitcoin - the price of bitcoin," said Wu, 44. "However, because we cash out straight away, that's not a problem for us."
Despite bitcoin's struggle for acceptance and concerns about whether the cryptocurrency will hold its value, Wu says it has many advantages for an online delivery-based business like his.
"I was left with the positive aspects: lower transaction fees, instant payment and no chargeback, and we have a wider clientele overseas - like in Macau, where PayPal doesn't process their orders," Wu said, referring to the eBay subsidiary responsible for many online payments. "More than half of our customer base is overseas, and we rely mainly on PayPal at the moment, but they cause a few problems for us."
Wu said his customers would usually order flowers for delivery to addresses other than their credit card billing address. But PayPal would flag up such transactions as possible fraud cases.
"They mark some sales as 'under review' … it can take them up to 48 hours to process, which causes a big problem for us," said Wu, whose company specialises in same-day delivery.
He believed a hacking attack on bitcoin exchanges earlier this week that led to a temporary suspension of bitcoin withdrawals was no more than a blip.
The benchmark Coindesk index last night showed the value of one bitcoin as US$640.77, up from US$567.63 on Monday.
